Dalrymple Bay Infrastructure in negotiations with mining companies for coal terminal fees

World’s largest metallurgical coal export facility releases details on terminal price changes, proposed expansions and 1H21 financial results

Dalrymple Bay Infrastructure Management is currently in negotiations with mining companies on price changes for the use of its coal terminal.

In March 2021, the Queensland Competition Authority approved the Dalrymple Bay Terminal to move to a “light-handed” regulatory framework, which would allow commercial price setting negotiations with customers.

The negotiations surrounding the price arrangements mean customers would not be bound to a single reference tariff set by the QCA, which was the case up until the end of June 2021.

CEO Anthony Timbrell said if DBIM and its customers were unable to reach an agreement, they would go back to the QCA to work out a price.

“We’re in the middle of the negotiations at the moment,” he said.

“We have provided a detailed proposal to our customers, and they responded with a detailed counter-proposal.

“We’re working out a process to determine whether we’re able to reach a negotiated outcome.

“That process sets our business revenue for the next five years.”

In August, the QCA said this light-handed regulatory framework would form part of the existing terminal for the purpose of determining access charges once the current contracts expire.

The framework would also form part of the proposed 8x expansion of the terminal.

The QCA published a Draft Determination that pricing for the expansion would be socialised.

“Any expansion would occur in response to growing demand and binding contracts executed by customers in the Access Queue,” Mr Timbrell said.

“Under the lease agreement with the Queensland Government, DBIM is required to expand, if requested to do so, subject to certain conditions including that DBIM deems the expansion to be economically viable.”

The 8X expansion presents a way to expand capacity in four phases, and increase the terminal’s current 85Mtpa capacity to 99.1Mtpa.

“Beyond that, another 25m tonnes of access requests from both existing customers who want to add capacity and from other companies who are looking to develop new projects within the central portion of the Bowen Basin,” Mr Timbrell said.

“Those customers seeking additional capacity have provided financial underwritings to allow us to fund the feasibility studies to investigate that expansion.

“We’re currently in the middle of a full feasibility study – it’s about a $26m job that will be concluded around mid-2022.

“Beyond that, we need to work our way through the commercial assessment of the project, which is a bankable feasibility study.”

DBIM will make a decision to go ahead with the expansion in the first half of 2023.

“If we go ahead, it’s about a $1.3b job and it will add about 15m tonnes of capacity to the terminal,” he said.

“It’s not all or nothing … we’ll only go ahead if the expansion is backed by binding long-term contractors and we’ll have to engage those on the back end of 2022 or by 2023.”